Small businesses in B.C. fear they’ll bear the brunt of the new employer health tax. (Patricktomasso photo)

30% of B.C. small businesses expect to cut staff to offset new payroll tax: report

Greater Vancouver Board of Trade said small, medium sized businesses will be hit the hardest

Small- and medium-sized businesses will bear the brunt of the incoming employer health tax, according to a survey from the Greater Vancouver Board of Trade released Monday.

The new tax, introduced by the NDP in February, will take effect on Jan. 1, 2019, and hits businesses with payrolls of more than $500,000. The tax rate is 1.95 per cent for payrolls above $1.5 million, with reduced rates for those between $500,000 and $1.5 million.

Two-thirds of small businesses, defined as those with fewer than 50 employees, say they expect to pay the incoming tax, which is estimated to cost them about $40,000 annually.

One-third of those employers already pay their staff’s current Medical Service Plan premiumss, which won’t be phased out till the end of 2019, meaning those businesses will be double-taxed for a year.

READ MORE: BC NDP getting employer push-back on health care tax

Of those small businesses who foresee having to pay the tax, 30 per cent say they expect to cut staff to help offset costs.

“Payroll taxes are job-killers, as they increase the cost of employing people and growing businesses,” said Chris Gardner, president and CEO of the Independent Contractors and Businesses Association.

“When you add it to the NDP’s carbon, income and other tax increases, record-high gas prices, cities passing along their own payroll tax costs through higher property taxes, and shaken investor confidence in B.C., it’s perfectly understandable that job creators are reeling.”

In defending the tax, Finance Minister Carole James pointed to her government chopping MSP premiums in half at the start of the year.

A finance ministry spokesperson cited B.C.’s real GDP growth of 2.4 per cent, the highest in Canada.

“We’ve taken concrete steps to improve business competitiveness from cutting the small business tax rate and taking the PST off of electricity to tackling the housing and childcare crises,” the statement read. We will continue taking the steps needed to ensure that B.C. is an economic leader today and tomorrow. ”

The province cut the small business tax rate by 20 per cent, down to two per cent.


@katslepian

katya.slepian@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Battle for Alberni Valley Bulldogs roster spots begins

Main camp opens this week at Weyerhaeuser Arena

ARTS AROUND: Join watercolour workshops in Port Alberni

Victoria artist Joanne Thomas will provide beginner and advanced classes

‘Beauty amongst such tragedy:’ B.C. photographer captures nature’s trifecta

David Luggi’s photo from a beach in Fraser Lake shows Shovel Lake wildfire, Big Dipper and an aurora

Bullhead derby returns to Port Alberni with new date, location

Lions Club partners with Maritime Discovery Centre

Vancouver Island woman to attempt historic swim across Juan de Fuca Strait today

Ultra-marathon swimmer Susan Simmons to attempt to swim from Victoria to Port Angeles and back

B.C. man builds 10-foot sign thanking fire responders

Ken Rawson built his “thank u” sign on Saturday as helicopters responded to fires around the province.

PHOTOS: Olympian Patrick Chan helps B.C.’s ‘SuperChefs’ celebrate 10th anniversary

Former figure skater among those at event Friday in Surrey

Smaller B.C. bus service prepares to replace Greyhound

Kootenay-to-Okanagan run would require online reservations

Mother charged with homicide of Langley seven-year-old

Aaliyah Rosa’s 36-year-old mother charged with second degree murder: IHIT

Despite threats, Soldiers of Odin a no show at B.C. tent city

Nanaimo’s Discontent City held a counter rally on Sunday

Trudeau formally announces he’ll run again in 2019

PM Justin Trudeau gears up to run in next year’s election

Smoke from B.C. wildfires prompts air quality advisories across Western Canada

A massive cloud of smoke hangs over B.C. and Alberta due to wildfires

Pope on sex abuse: “We showed no care for the little ones”

In response to the Pennsylvania report, Francis labeled the misconduct “crimes”

Most Read